We’ve all heard the phrase cash is king and know how important a small business’ cash flow is to its success. We know that we want to get customers to pay upfront when possible, collect receivables quickly, and stretch payables as long as we can. But our customers know the same and their payables are our receivables – so here are a few tips to create a credit policy that will ensure customers actually pay up when we need them to so that we don’t run into cash flow issues that could cripple the company.
First and foremost, only issue credit to customers if you really need to. You should try to get customers to pay you at the time of sale, if possible. If you do need to issue credit, make sure you only do so for trusted customers and perform a credit check before you let someone walk away without you having payment in hand.
Secondly, make sure you put all of your credit terms in writing so that there is no confusion about when you expect to be paid and how much. Make your customers sign off on the terms so you know they understand what will happen if they don’t pay you on time.
Thirdly, make sure you gather all of the necessary information from anyone to whom you issue credit so that you can easily find them if they don’t pay. You need to have their contact info, their EIN or social, and in some cases you may want to ask for a personal guarantee from the business’ owners.
You may also want to consider if offering discounts for payment makes sense for your company. Simply run the numbers – it may be more beneficial to you to give someone 2% off if they pay you within 7 days than to try to collect the full amount in 30. Of course, if you decide to do this, make sure that you have everything in writing and that both sides are on the same page about what the payment terms are.
Lastly, don’t forget to follow up. If a payment is due on the 1st you shouldn’t be waiting until the 1st of the next month to realize that you weren’t paid and give that customer a call. You can’t effectively manage your receivables unless you stay on top of them.
Have you ever had trouble collecting payment from customers at your small business or startup? What tips do you have to help other entrepreneurs get paid what they’re due?
No matter why an entrepreneur starts his or her new company, it’s very common that somewhere along the way s/he loses sight of what the original goal was. That’s why it’s so important that all entrepreneurs regularly check in with themselves to ensure that their actions and business strategy continue to align with their overarching goals. This goal alignment is the secret to achieving what you wanted to achieve by becoming an entrepreneur in the first place.
In order to make sure you’re still on track you first need to identify what your original goals were with starting the business. Did you seek freedom, autonomy, and control? Work-life balance? An IPO and billions of dollars? Whatever it was that kickstarted your career in entrepreneurship to begin with, take a second to remember it and write it down.
Next, identify what your current goals are with your company. Maybe they’re exactly the same as when you started but maybe they’ve changed. It’s perfectly acceptable to have reassessed where you want to go, but when you compare your current goals to your original goals, make sure that if they don’t match up you’ve given some real thought to why they’ve changed and that you’re 100% comfortable with where you now intend to go as opposed to having just let your goals wander away as things came up in your business or having been influenced by others. Comparing current goals to your original goals can often highlight for you where you may have let things get away from you and bring you back to focusing on what’s really important to you.
Now that you’re 100% clear on what you want out of entrepreneurship, take a look at your business’ strategy and check that it aligns with those goals. So often people get sucked into running their businesses and forget to keep their eyes on the prize. If you became an entrepreneur because you wanted to improve your work-life balance and spend more time with your family but your company’s growth strategy will require you to work 15 hours a day, 7 days a week – you need to take a step back and figure out how to adjust your business strategy. If you want to IPO but you have no plan in place for growth or financing, you need to do your homework and develop a strategic plan that will get you there.
And finally, once your strategy and goals are aligned, you have to check in on your actions and make sure that they match up with the strategy you’ve already confirmed will get you to your goals. Creating a growth strategy that involves you making 100 sales calls a week and then going to the beach instead does not get you where you want to go, nor does hiring a manager to handle your business so that you can spend time with your family and then micromanaging him or her so that both of you are working 15 hour days.
Entrepreneurship has a great many benefits to offer, but only if you remember to give yourself and your business a check-up and keep your strategy and actions aligned with your goals.
Yesterday’s quotable seemed very appropriate for this post so here it is again:
Many entrepreneurs and small business owners, especially women, feel a bit uncomfortable with tooting their own horn to promote their business. But getting the word out is key to success in business, so here are a couple of tips to help you get over this self-promotion shyness and start telling the world about the amazing product or service that you have to offer:
Have you ever struggled with self-promotion shyness? If yes, please share below how you’ve managed to deal with it and to effectively promote your small business or startup. I’d love to hear everyone’s tips!
Do you know anyone who struggles with feeling good about promoting him/herself and his/her business? Share this post and maybe you’ll help them get over it, get out there, and get more business. e.d
Utilizing teleworkers can be a great way to reduce costs and give employees flexibility at your small business or startup, but managing them requires an entrepreneur put in a little extra effort to ensure that everything runs smoothly. Here are some tips to help make your teleworking program a success.
This week’s New Venture Mentor video is a bit different from what I usually do and I hope you all like it! Instead of listening to me blabber on and on this week, you get to hear from an expert I brought in to talk a bit about what bankers look for in a candidate for a small business loan.
I get lots of questions on this topic so I thought it would be best to hear some advice straight from the horse’s mouth. That’s where Joaquin comes in. Joaquin Gallardo is a business relationship manager with Wells Fargo Bank in the DC metro market. He manages business accounts ranging from startups to companies over $50 million in annual revenue, which includes managing their lending requirements. He’s been serving the business banking segment for the past 6 years with the most recent 2 at Wells Fargo. He currently serves on the George Mason University School of Management Alumni Board of Directors and is a founding member of the George Mason Business Roundtable.
See what advice he has to offer entrepreneurs in the video below:
Want to find out more about Joaquin or get in touch? You can find him here.
Many an entrepreneur dreams of raising money from a prominent venture capital firm or angel investor, but this type of funding is hard to come by. If your company is suitable for an equity investment and you’ve been lucky enough to land an audience with some investors, it’s important that you don’t blow your pitch if you want to make a good impression and get the funding you need.
Today’s video gives you some quick tips to make sure that your pitch impresses your potential investors so that you can get money you need to build your dream startup.
I’m a huge advocate of startups and small businesses utilizing interns and I think that entrepreneurs can get a huge bang for their buck by doing so, while at the same time helping young people learn, grow, and add a great internship to their resumes. However, if you don’t properly manage interns, they can turn into nothing more than a huge time suck and actually become a hindrance instead of a help.
To make sure that you don’t waste your time (or that of your interns) here are some tips for managing interns at your small business or startup:
What tips do you have for recruiting and managing interns? Do you have any horror stories or success stories that you’d like to share? Please let us know what you think the benefits and struggles are of working with interns in the comments section below.
One of the biggest stresses for entrepreneurs can be figuring out where to get the necessary to capital to start your dream business or to grow your existing business to its full potential. If you don’t have a finance background and/or this is your first time as an entrepreneur, you may not be familiar with all of the funding options available to you and choosing the best option for your business is critical to your company’s continued growth and success.
This video will give you a quick overview of the funding options available to help you get started with exploring the best financing for your small business. If you’re still confused and need some help deciding what type of financing is best for your company, talk to a mentor or head to the “Work with Cate” page and make an appointment to speak with me about how best to move your dream business forward.
Choosing a cofounder to help you build the startup you envision into a real business is one of the most important first steps in laying the foundation for success. Poorly matched cofounders will have innumerable disagreements, create TONS of unnecessary headaches, and hold back the growth of a business. Yet, despite knowing this, many entrepreneurs don’t put the necessary time and effort into vetting potential cofounders to ensure that the founding team will work well together, complement each other’s strengths and weaknesses, and effectively delegate to build their budding business into a thriving company.
If you’re about to get into bed with a new cofounder, use these tips to make sure you’ll avoid the biggest pitfalls and choose a cofounder who will help you get ahead, not one who will hold you back.
While some may tell you otherwise, a business plan – whether formal or informal – is vitally important to any entrepreneur as he or she begins to move forward with starting and growing his or her business. This video gives a brief overview explaining the basic components that every entrepreneur should include in the business plan for his/her small business or startup.